Britain discloses plan to overhaul welfare system

Chancellor of the Exchequer George Osborne's plan to cut half a million jobs and slice welfare benefits was met with demonstrations across London.
Washington Post Foreign Service
Thursday, November 11, 2010; 8:11 PM

LONDON - The new Conservative-led government Thursday unveiled the biggest overhaul to Britain's welfare system since World War II, moving to reduce and consolidate assistance programs and weed out benefit cheats as part of its broader effort to dramatically slash government spending.

The move marks another step in the coalition's ambitious campaign to slash the whopping budget deficit, cutting $128 billion in spending over the next four years while chipping away at what it sees as bloated government payrolls and an overly paternal state system. It comes at a time when the British government is leading an effort across Europe to rein in runaway deficits, with nations from Spain to Greece to France rolling back time-honored government benefits in the name of fiscal austerity.

In fact, the overhaul here, analysts said, is set to be so transformative that it will bring unemployment and welfare benefits in Britain closer in line to those in the United States, moving it further away from the traditionally more generous state benefit programs of continental Europe.

The system is designed to prevent millions of Britons who now get welfare benefits from enjoying incomes greater than those who work. The overhaul would also consolidate what had been 30 benefit programs - such as those for people with disabilities and child assistance - into one universal program. Anyone who turns down more than three job offers would also be at risk of losing their benefits for up to three years. Some welfare recipients unable to find jobs could also be forced to do unpaid community service.

But at the same time, benefits would be withdrawn less abruptly when claimants do find jobs, encouraging them to reintegrate into the workforce. The program, the government said, would give a financial boost to some of the poorest households, while a tougher line on welfare cheats and other reductions would save an estimated $2.4 billion a year. The opposition Labor party cautiously welcomed the plan, saying it would support the overhaul if it was carried out correctly and did not hurt the most poorest.

"We right now have a system that traps people," Ian Duncan Smith, the government's work and pensions secretary, told the BBC. The reforms, he added, would create a system "making work pay more than being in benefits. That's the creditable bit."

The announcement comes one day after tens of thousands of students marched through London to protest plans to reduce government subsidies that have kept tuitions relatively cheap in Britain for years. The welfare plan, analysts said, might fuel further resistance to the coalition's cost-cutting effort, although at least one poll released Thursday showed more than half of the British public supporting some form of welfare overhaul.

On Thursday, leading welfare advocates offered mixed assessments of the plan. Some said aspects of the program looked promising, particularly allowing claimants to wean themselves off benefits more slowly after finding jobs. But others condemned it as potentially damaging to the poor. In anticipation of the plan, some critics, such as Rowan Williams, the Archbishop of Canterbury, have said it would stigmatize welfare recipients, plunging them deeper into a "spiral of despair."

Some aspects of the overhaul, critics said, did not make sense. For example, the system is to be largely administered though the Internet to cut down on overhead costs, despite the fact that more than 1 million claimants do not have Internet access at home.

"It is hard to see how Britain's poorest children are going to be helped using sanctions creating a climate of fear," Sally Copley, head of policy at Save the Children, said in a statement. "It is children who will suffer when a single mum is told to take a job, but there is not suitable child care available."

Special correspondent Rebecca Omonira-Oyekanmi contributed to this report

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