Poor ‘with least to lose should take more risks’

Lord Freud said the benefits system was “dreadful” and allowed lone parents and sickness claimants to “have a lifestyle” on the state.

The Tory peer, who is helping to push through a radical overhaul of the welfare state, insisted he understood the reality of living on benefits, arguing “you don’t have to be the corpse to go to a funeral”.

In an interview with The House magazine, he said: “We’ve got the circumstances now where... people who are poorer should be prepared to take the biggest risks – they’ve got least to lose.

“We have, through our welfare system, created a system which has made them reluctant to take risks so we need to turn that on its head and make the system predictable so that people will take those risks.

“I think we have a dreadful welfare system.”

He added: “You know, the incapacity benefits, the lone parents, the people who are self-employed for year after year and only earn hundreds of pounds or a few thousand pounds, the people waiting for their work ability assessment then not going to it – all kinds of areas where people are able to have a lifestyle off benefits and actually off conditionality.”

Lord Freud dismissed the possibility of taking part in a television documentary which filmed him living on benefits for a week, something a number of politicians have done in the past.

“I have thought of the issue,” he said. “The trouble is, it’s a stunt when someone like me does it because you do it for a week. That’s not the point.” He added: “I think you don’t have to be the corpse to go to a funeral, which is the implied criticism there.”

Lord Freud advised the Labour government on welfare after publishing an independent report in March 2007 on the Welfare to Work system.

He said former premier Gordon Brown “thought he could soften me up and then dump me in with his officials and I would just capitulate” in talks they had on reforms.

Shadow work and pensions secretary Liam Byrne said: “Lord Freud is a former investment banker and now a Minister of the Crown. For him of all people to compare people on benefits to corpses and likening their lives to a funeral is quite frankly disgusting.”