David Cameron accused of bogus accounting over plans to slash incapacity benefit

Employment minister Jim Knight says move to cut £25 a week from 500,000 claimants will penalise the sick

David Cameron was today accused of bogus accounting and penalising the sick after he unveiled plans to impose a £25-a-week benefit cut on as many as 500,000 incapacity benefit claimants.

The Conservatives want to use the savings to fund a £600m back-to-work programme. They believe their "tough and tender" approach will show that they are willing to address the victims of the recession by offering extra apprenticeships and training and by modernising welfare.

Cameron described the measures as "the centrepiece of the Tory conference" and a "big, bold, radical scheme to get millions of people back to work".

But a government minister hit back today, claiming that the £600m of savings identified by the Tories were already included in Treasury spending plans.

The decision to focus on helping the unemployed at the start of the party conference reflects Cameron's concern that his party's recent rigid focus on cutting the budget deficit faster than Labour, due to be highlighted on Tuesday by the shadow chancellor, George Osborne, risks obscuring broader political messages.

The core elements of the Tory package involve putting everyone on a single out-of-work benefit, including the 2.6 million incapacity benefit claimants and lone parents. The back-to-work programme will largely be run by voluntary groups and private sector companies.

The Conservatives claimed that medical assessments designed to test whether incapacity benefit claimants were fit to work will lead, on the basis of government research, to at least 500,000 current claimants being shown to be capable of working.

Anyone deemed capable of working after this test will be put on jobseekers' allowance worth £63.40 a week and not the current incapacity benefit rate of £89.90 a week, the Tories said.

The savings are said to be worth £600m over the first three years and £1bn over a five-year parliament.

The scheme would also include 100,000 additional apprenticeships, 50,000 additional training places at colleges and 50,000 "work-pairing" places for young people.

The Tories said the programme would lead to the 2.6 million people on incapacity benefit returning to work more quickly than they would under Labour.

In addition, Treasury rules would be changed to allow the government to use benefit savings once someone had found work to pay welfare-to-work providers – a reform Labour said would cost billions.

In an attempt to keep costs down, the Tories said private sector providers would only be given 20% initial funding for each jobless person taken on with the remainder given by the state after the unemployed person has been in work for a year.

Osborne underlined the programme's political importance to the Conservatives yesterday, saying: "People may be surprised to see the Conservative party beginning their conference talking about how we are going to be the party of jobs, but we are absolutely determined to deal with this jobs crisis early on should we form the next government."

This morning Jim Knight, the employment minister, said the Conservatives were only interested in cutting the benefit bill. "We do believe savings can be made in the longer term and these are factored into Treasury plans. But this is not a quick fix," Knight said.

"The only way the Tories can make £600m savings quickly is by rapidly cutting payments for people who cannot possibly work.

"Having lumped people off unemployment on to sickness benefit in the previous recessions, now the Tories want to rush to shift them back into unemployment just so they can cut their benefits.

"This is unfair on the genuinely sick, who should not suffer a £25-a-week cut in benefit."

Labour is planning to test incapacity benefit claimants over the next three years, at a rate of 10,000 medical assessments a week, and it would be impossible for the Conservatives to push this process any faster, party sources said.

Cameron also said his back-to-work package would cover anyone aged 18 to 24 who had been unemployed for six months, as opposed to the Labour guarantee of a job on the minimum wage for anyone unemployed for 10 months or more.


Patrick Wintour and Andrew Sparrow

The GuardianTramp

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