Chris Grayling: We must take our abused welfare system off the sick list

"How's your son doing now," the teacher asked the mother of a recent school leaver. "He's doing really well for himself," was the reply. "He's got himself put onto the sick."

That story was relayed to me a couple of months ago by the teacher, who works at a large secondary school in one of our biggest cities.

Britain today has nearly five million people claiming out of work benefits. Of those, 2.6 million are claiming incapacity benefit. Ministers admit that one million of those say they would like to go back to work. Nearly one million more are claiming Jobseeker's Allowance.

Yet over the past 10 years at least one-and-a-half million people have come to work in the UK from overseas. Britain has been creating new jobs – but most have gone to people from other countries, while millions of British people stay dependent on benefits. It just doesn't make sense.

Many of those people want to be back in work. Some don't – like that young school-leaver. At the moment, the system is failing on all fronts.

This time the real and radical reform we need really has to happen. We've had too many false dawns and too many broken promises in the past.

When Gordon Brown rushed out a hastily cobbled together and rehashed set of announcements on welfare last week to try to divert attention from Conservative plans, it was little short of an admission of failure. Since he became Prime Minister just six months ago we've had three major documents and a string of lesser announcements on his plans. More and more words, little actual action. All designed to steal short term party political thunder – none with any sign of a long term vision for Britain.

Take the New Deal, which Mr Brown was celebrating last week. In the past 10 years, more than 3bn has been spent on the programme. Yet youth unemployment is actually higher than it was in 1997.

That's why we think that tinkering will no longer do the job. We're proposing plans which will lead to the biggest changes in the way our welfare state works for decades.

We'll end the culture of entitlement. We'll help people back into work – but there will be tough penalties for those who won't work.

The programme we are building will start with rapid assessments for all recipients of the main out of work benefits. That will include medical assessments for people claiming incapacity benefit. We will ensure that only those recipients of incapacity benefit who really cannot work are allowed to stay outside the return to work process.

We will make sure we live up to our responsibility to help people back into work by doing much more to help them get a job. That will involve introducing a comprehensive programme of support for job seekers including training, development, and work experience, of the kind that has proved successful in many other countries.

We will also introduce for the first time in Britain long-term mentoring for people when they are back in work, to ensure they stay in work.

But we also expect people to take responsibility themselves for finding a job. Those who will not do so will face tough penalties.

People who refuse to join one of the new return to work programmes will lose the right to claim out of work benefits until they do. People who refuse to accept a reasonable job offer will lose the right to claim those benefits for up to three years.

And we will make it impossible for unemployed people to sit at home on benefits doing nothing. For those who have been claiming for more than two years out of three, our Welfare to Work package will introduce mandatory community work programmes. It will help give extra experience to the long-term unemployed, and provide a real disincentive to anyone abusing the system.

Delivering these programmes in the UK will be the responsibility of a series of independent organisations, both private and not-for profit, which will have the job of helping people find jobs – and will only get paid when they do. That's what happens in other countries. It should happen here.

For Britain such an approach marks a revolution in our welfare state. It marks an end to a situation where the receipt of incapacity benefit is an unconditional entitlement. In the future it will carry with it the responsibility to do everything that you can to get back into work and help lift yourself out of the poverty trap that the benefit system can represent for so many people.

If we are to overcome poverty and deprivation in the UK, getting people back into work is a must. There is more to poverty than worklessness – but unless we tackle worklessness, we will never tackle poverty.

A country where a young man and his family can regard it as an achievement to get onto the "sick" is one which desperately needs reform. A country that brings millions of workers in to fill job vacancies, but cannot help people out of the trap that benefit dependency has become is one which desperately needs change.

Chris Grayling is the shadow work and pensions secretary.