'Radical' benefits reforms unveiled by Government

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The Government has unveiled radical proposals to reform the UK's "antiquated" benefits system, pledging the biggest overhaul in decades in a drive to simplify the structure and make work pay.

In a speech in London, Work and Pensions Secretary, Iain Duncan Smith said the current system had helped create ghettos of worklessness, often affecting generations of families.

He said the current arrangements amount to a "supertax" on some of the worst off in society, often meaning that some people would be taxed on the first eight or nine hours of the first ten hours they work, providing little incentive to work.

Mr Duncan Smith set out a series of options aimed at ensuring that people would see the value of moving from benefit to work through simplifying the existing tax and benefits system. He wants to unify the disparate elements that form the benefits structure as well as rectifying the "illogical" position of benefits paying more than work.

Options included combining elements of the current income-related benefits and tax credit systems, bringing out-of-work and in-work support together in a single system, and supplementing monthly household earnings through credit payments reflecting circumstances such as children, housing and disability.

There are 14 manuals dealing with benefit claims, and one adviser recently spent 45 minutes on a computer with a lone parent before discovering she would be better off working, he said.

"We need nothing less than a complete rethink of the benefits system. A new regime to replace the current complicated system. We have a rare opportunity to reinvent our antiquated welfare system to reflect the nature of what people need."

Shadow work and pensions secretary Yvette Cooper described Mr Duncan Smith's announcement as "a sham to cover the fact that the Budget actually cut work incentives, cut jobs and cut help for people to return to work".