"I'm confused by ministers like James Purnell going to the poorest in our society... " Mick Hucknall
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The Government will announce the biggest shake-up to benefits for the sick and disabled for 60 years today by removing the financial incentive for people to remain on incapacity benefit.
Alan Johnson, the Secretary of State for Work and Pensions, will publish a five-year welfare plan to restrict the level of benefit, which is paid to 2.7 million people at a cost of £6.7 bn a year. For new claimants, the Government will scrap the automatic increases in the level of payments after claimants have been on it for six and 12 months.
Some ministers wanted to cut payments to the less generous level of Jobseeker's Allowance (JSA) for the unemployed or impose a maximum time limit for people to stay on incapacity benefit. But Mr Johnson opposed the idea, winning the backing of Gordon Brown, the Chancellor, for a less draconian approach that will include a £40-a-week bonus for claimants who return to work.
But he has not yet won the support of the Treasury for his "citizen's pension" plan based on residence rather than national insurance contributions, which would lift almost one million pensioners out of poverty.
The scheme, similar to the policy of the Liberal Democrats, would provide significant help for women, only 13 per cent of whom qualify for the full basic state pension. To reduce the £3bn a year bill, the retirement age might be increased. But Mr Brown is wary about the cost and Tony Blair has not yet been convinced.
Mr Johnson will not mention the idea in today's blueprint but is battling for the Cabinet's approval to include it in a "statement of intent" on pensions to be issued before the general election. But Downing Street and the Treasury want to delay decisions on Britain's "pensions timebomb" until a commission chaired by Adair Turner issues its final report this autumn.
Mr Blair said it was a "perverse disincentive" that the scheme rewarded long-term claimants. "At the moment, these rules penalise those who want to manage their condition and return to work," he said.
He said the three key elements in today's proposals would be reforming rules which pay claimants more the longer they are on benefit; providing more support for the most severely sick and disabled and encouraging claimants who engage in rehabilitation and training; and ensuring that nobody was "written off" while expecting everyone to "fulfil their responsibilities" to work if they are able to do so. "Those who play by the rules get the help. Those who don't play by the rules should start playing by the rules," Mr Blair said.
Steve Webb, the Liberal Democrats' welfare spokesman, said: "Seven years ago, ministers were saying exactly the same things. Disability has shades of grey, but the current system is black and white. We need a system that fits people the other way round."
http://www.independent.co.uk/news/uk/politics/disability-benefit-cut-but...
The Employment minister Tony McNulty has admitted that he could not survive on the basic unemployment benefit paid to people made redundant. As dole queues surged to a 10-year high of 1.97 million, he acknowledged that it was "very, very difficult" to exist on jobseekers' allowance (JSA).
The benefit is worth £60.50 a week for people aged 25 and over, and £47.95 a week for younger claimants.
Mr McNulty is paid a salary of £104,050 – equivalent to £2,000 a week – as a minister of state.
It takes him just over five hours to earn the equivalent of the weekly JSA payment. His salary is dwarfed by the income of his wife, Christine Gilbert. She was paid up to £230,000 last year as the chief inspector of education, children's services and skills.
Mr McNulty's admission came in a BBC
Radio 5 Live interview when he was asked how he expected people to make ends meet on £60 a week.
He replied: "We just need to work with them to try and get them back into work at the earliest opportunity." Challenged about whether he could survive on that income, he conceded: "I don't think I could. I'd be the first to say that." The minister added: "I think it's very, very difficult and in most instances – not everybody – people will have other support from the state as well, through a range of other benefits."
Brendan Barber, the TUC general secretary, said the comments proved the need for an increase in jobseekers' allowance, adding: "Even government ministers admit they couldn't live on today's unemployment benefit of less than £10 a day – one of the lowest relative to wages in the developed world."
Steve Webb, the Liberal Democrat work and pensions spokesman, said: "The minister isn't telling people on benefit anything they don't already know. What is appalling is that he doesn't appear to want to do anything about it."
The jobless total reached 1.97 million at the end of December. It looks certain to pass two million next month following a spate of redundancies after Christmas, and business leaders forecast that three million people could be on the dole within a year.
The number of people claiming JSA stood last month at 1.23 million, a rise of 73,800 since December and the 12th consecutive increase. The size of the workforce dropped last year by 66,000 to 29.4 million.
The number of UK-born workers in employment fell by 278,000 to 25.6 million, while non-UK-born workers increased by 214,000 to 3.8 million.
Theresa May, the shadow Work and Pensions Secretary, said: "These figures once again expose what a cynical piece of political spin the Prime Minister's claim of 'British jobs for British workers' was."
Further job losses announced yesterday included 380 at the cash-and-carry retailer Makro, which is closing superstores in Coventry, Wolverhampton and Swansea, while 65 posts are being axed by the newspaper group News International.
The Governor of the Bank of England, Mervyn King, delivered a grim prediction over the length and severity of the downturn. He warned Britain was in a "deep recession" and forecast a 4 per cent contraction in the economy between last summer and this summer.
That is far larger than previous projections. Mr King also feared that repairing the impact of the credit crunch on bank lending "will not be easy and will take time".
The Health Secretary, Alan Johnson, also suggests in an interview in The Spectator today that the downturn could last until the beginning of 2011. Contrasting the current economic slump with previous recessions, he told the magazine: "What happened in the Eighties and what happened to a certain extent in the Nineties is that whole areas, Hull for instance, were just left with no help at all.
"If we can get through this, a year, 18 months, even two years, with all the agencies focusing on how you give people skills to fill the vacancies, then you will have a completely different picture at the end of this than you did at the end of the Eighties."
http://www.independent.co.uk/news/uk/politics/minister-i-couldnt-live-on...