Analysis shows 420,000 may be excluded : Ministers firm over invalidity benefit cuts

THE GOVERNMENT will press ahead with plans to withdraw invalidity benefit from thousands of people and tax others, Downing Street confirmed yesterday, amid conflicting claims over the link between unemployment and sickness.

Number 10's admission reflects growing confidence among ministers that the clampdown will provoke nothing like the wave of protest that followed the imposition of VAT on domestic fuel. Some believe it would be difficult for opponents to find justification for not tightening up the system, removing scope for alleged 'malingering'.

But Mr Major's statement to MPs that it 'beggared belief' that so many more people had become invalids over the last decade stands in marked contrast to admissions made by the Department of Social Security to the Commons Public Accounts Committee (PAC) in 1990.

Under questioning, Michael Partridge, the permanent secretary, admitted that unemployment was a non- medical factor in the growth in claims: 'If you are unemployed for a long time, there is evidence . . . that this may have an adverse effect on your health at the time and you may go on to an invalidity benefit,' he said.

In a further development, the first independent analysis of the plans to save pounds 1.3bn in benefit payments over the next seven years - mistakenly leaked to the Press Association last week - concludes that up to 420,000 people may be excluded, many more than the DSS's 30,000 to 60,000 estimate. The report, by the Policy Studies Institute, says many losers will be existing claimants when medical certificates come up for renewal. But the Government's determination to get the details, and the savings, worked out in time for the November Budget was underlined yesterday when a pre- arranged meeting between the Prime Minister, Peter Lilley, the Secretary of State for Social Security and Michael Portillo, Chief Secretary to the Treasury, was expanded to include Kenneth Clarke, the Chancellor, and Michael Forsyth, Minister of State for Employment.

The presence of the Thatcherite Mr Forsyth, rather than the moderate David Hunt, the Secretary of State for Employment, tipped the balance of the meeting towards the right.

The emerging hard line was seen yesterday as an indication of Mr Major's resolve to reassert his authority and counter Norman Lamont's accusation of short-termism.

Number 10 insisted there was no evidence for claims that unemployed people had been officially encouraged off the jobless register and on to invalidity benefit. It pointed to a survey last week by Monitor Weekly which said two-thirds of inner-city doctors questioned admitted signing people on to invalidity benefit who were not sick or whose illnesses were not serious enough to prevent them working.

The PAC's report said the DSS had admitted the growth in invalidity benefit claims was more acute where the loss of jobs in traditional industries meant that work was no longer available for older people without retraining.