Blunkett: Incapacity benefit to be overhauled

Three key welfare reform bills have been unveiled by the Queen.

Giving her state opening of Parliament speech on Tuesday she said: "My government will continue its reform of the welfare state in order to reduce poverty further, offer greater equality and match rights with responsibilities."

Central to the programme will be reform of incapacity benefit, with ministers determined to bring down one of Whitehall's largest costs and help more people into work.

Under plans already unveiled, incapacity benefit, which is paid to 2.7 million sick and disabled people, will be replaced with an extension of the New Deal programme for the unemployed.

People with the most severe conditions would get a new disability and sickness allowance, with no requirement to look for work.

Compulsion

But most claimants would move onto a new rehabilitation support allowance - with a lower rate for those not trying to return to work.

However, some Labour MPs fear the government may be going too far in compelling claimants to look for work.

New work and pensions secretary David Blunkett said last night that the aim of disability benefits reform is not to punish people.

"Don't believe for a minute that the reform of the welfare state for the 21st century is somehow punitive. It is not," he said.

"It is about 50 years on taking a real look at what people want in their own lives."

Pensions

A draft pensions bill will also be introduced in the coming session of Parliament, although its detail will largely be dependent on the finding's of former business leader Adair Turner's commission on Britain's savings crisis.

But the Queen said the government will "begin long-term reform to provide sustainable income for those in retirement".

The statement suggest ministers are preparing to grasp the nettle of reform, rather than continue with the sticking plaster solutions to pensioner poverty they have come up with so far.

Options could include compulsory savings and/or raising the retirement age so that the ratio of workers to those out of employment is brought back into balance.

In a further bid to grapple with welfare fraud and abuses the Department of Work and Pensions will pilot a Housing Benefit Bill.

The legislation will seek to extend tenants' responsibility for paying rent to housing associations and landlords and reduce complex rules for claims.

Reaction

Liberal Democrat work and pensions spokesman David Laws said: "The test will be in the substance of the new proposals rather than in the government's spin.

"The government has long talked about pensions reform, reform of incapacity benefit and housing benefit without achieving much."

Plaid Cymru parliamentary leader Elfyn Llwyd said: "New Labour is putting unfair pressure on those who are genuinely sick and disabled.

"The effect of this benefit upheaval on those who are truly incapacitated will be to create unnecessary uncertainty and distress.

"Successive governments have offloaded the unemployed on incapacity benefits in order to massage the unemployment figures, now, when it suits them, they are attacking them.

"They plan to push Welsh people into jobs that simply do not exist in some places. Providing proper employment opportunities for the disabled would be of much more use than imposing harsh benefit cuts."

But Kate Nash, chief executive of disabilities group RADAR said: "David Blunkett's words will be reassuring to disabled people. 

"RADAR believes strongly that 'disability' does not mean 'cannot work'. We know that with the right support, even those people assessed by doctors as having 'severe' conditions such as blindness are able to work, and do."

And Age Concern director general Gordon Lishman said: "We support the aims of this bill but the devil will be in the detail.

"Many older people want to get back into work but the system must be flexible enough to accommodate individual health needs and circumstances. Those who are unsuccessful in finding work should not be penalised - everyone should have access to a decent income."