Benefits report fails on major issues, says poverty charity

Campaigners have welcomed parts of a report on benefits reform by former Conservative leader Iain Duncan Smith, but say it should have done more to tackle the poverty faced by disabled people.

The Dynamic Benefits report from Duncan Smith’s Centre for Social Justice (CSJ) suggests streamlining the entire benefits system, replacing the current 51 benefits with two “universal credits”.

The report says such a move would see 600,000 households move from welfare into work and boost the incomes of the lowest-paid by nearly £5 billion.

Despite initial costs, the report claims the new system would end up saving taxpayers money.

CSJ said the report was designed to provide a Conservative government with “a detailed blueprint for reform of the £74 billion-a-year welfare system”.

A Conservative party spokesman said it would look at the publication “with interest” although the report was “totally independent” of the party.

Under the scheme, there would be a universal work credit for those out of work or on very low wages. This would combine jobseeker’s allowance and income support, as well as incapacity benefit and the new employment and support allowance.

There would also be a universal life credit, to cover additional living expenses for all those on low incomes. This would combine housing benefit, council tax benefit, disability living allowance, working tax credit and child tax credit.

To reduce disincentives to work, the report suggests reducing the rate at which benefits are cut if a claimant takes a low-paid job, and increasing the amount of income a household can earn before benefits start to be phased out.

Neil Coyle, director of policy for Disability Alliance, the disability poverty charity, said disabled people could benefit from a simplified benefits system through increased levels of take-up, and reduced levels of poverty affecting families with disabled children.

But he said there was no real mention in the report of how disabled people would fit within the new system, or how to get 600,000 people into jobs when there are so many people already seeking work and there is still “blatant employment discrimination against disabled people”.

Coyle said the report also “undermines the contribution that benefits such as disability living allowance could make to tackling poverty”.

17 September 2009