Crackdown on benefits 'scroungers'

Labour plans incentives to combat 'can't work, won't work' brigade

Jobless people who refuse to accept help to get them back into work face losing their benefits, Work and Pensions Secretary John Hutton revealed yesterday.

Signalling a major crackdown on the "can't work, won't work" minority, he said that hard-working families could not be expected to pay for those refusing to take jobs.

In a speech to the Institute for Public Policy Research, he said that there was a "small group" of benefit claimants in areas with plenty of jobs who were physically able to work.

Alongside more help for individuals with mild alcohol problems, mental health difficulties and skills deficiencies, Mr Hutton said stronger incentives were needed to persuade people into work.

"If we are to break the cycle of benefit dependency, we need to ask whether we should expect more from those who remain on Jobseeker's Allowance for long periods of time in return for the help we provide," he said.

"More active steps to get back into the labour market. More involvement in programmes that could increase the prospect of getting a job.

"And for those who won't do so, then there should be consequences, including less benefit or no benefit at all."

He said that benefit claimants needed to compete for jobs with migrant workers, many from Eastern Europe.

He went on: "We cannot reasonably ask hard-working families to pay for the unwillingness of some to take responsibility to engage in the labour market.

"Especially when we know that around half of the children living in poverty in Britain today live in a household where an adult is already in work. Fairness is a two-way street."

A forthcoming benefits review would address these issues, he said.

The pledge comes as new figures reportedly show that more than 400m is paid out in benefits to couples claiming to live separately but who actually live together.

The HM Customs and Revenue figures show that 305m of tax credits and

106m in other benefits, including Income Support and Jobseeker's Allowance, were paid out in such circumstances, reports said.

According to Government figures, around 950,000 people were claiming Jobseeker's Allowance last month. Nearly 100,000 of those are thought to have spent six of the past seven years on benefits.

Mr Hutton's speech is bound to raise concern among Labour MPs, many of whom oppose moves to try and force people off benefits.

It may also encounter resistance from Gordon Brown. Mr Hutton is seen as one of the last remaining "true Blairites" in the Cabinet, and the review could reduce the Chancellor's room for manoeuvre if, as expected, he succeeds Tony Blair next year.

Ministers have admitted that the original estimates for how many immigrants would come to the UK from new European Union member states were far too low.

More than 500,000 have arrived from Poland and other countries since 2004 – dwarfing the Home Office prediction of around 13,000.

Shadow Work and Pensions Secretary Philip Hammond said: "We would support genuine steps to help and encourage existing claimants back into work, but Labour's track record isn't promising.

"After 10 years to make good on Labour's promise of welfare reform, this 11th hour assault has more to do with Labour's internal feuding than with a genuine attempt to help people back to work."

David Laws, Liberal Democrat work and pensions spokesman, added: "Labour has been in power for almost 10 years, so it seems extraordinary that in the twilight months of Blairism, John Hutton should be calling for 'a review' to sort out such an important problem."

He added: "If the usual Blairite gimmicks haven't worked since 1997, they're not likely to work now." Colette Marshall, UK director of Save the Children, said: "There are many families who are simply unable to work, due to disability or childcare responsibilities, and these people should be supported, not demonised.

"For those who are trying to get back into work there are still huge barriers.

"Before the Government talks about benefit cuts they should be recognising the problems faced by families trying to work such as high transport and childcare costs, low wages for people with few skills and the very high tax rates faced by people on low incomes – in some cases as high as 85 per cent." Comment: Page 10.