Reform of benefit system could see introduction of London weighting

Benefit levels could be varied around the country to reflect the cost of living in different regions under plans for a radical revamp of the welfare state.

Iain Duncan Smith, the Work and Pensions Secretary, published wide-ranging proposals yesterday in an attempt to simplify the benefit system, including rolling more than 50 allowances into a "universal credit".

A surprise inclusion was the suggestion that benefit levels could be "localised" between different parts of the country.

Mr Duncan Smith said: "I am very keen to see what we can do to make sure that the delivery of benefits, and the calculation of benefits, is closer to people. Right now this is a very faceless set-up, very difficult to understand, and often set by people many, many miles from those who live there."

Asked whether the move could lead to lower payments for claimants in Newcastle than those in London, he told BBC Radio 4: "We want to talk to people from different areas to see whether or not they would prefer that."

Last night, Labour denounced the proposal – which is also likely to cause qualms among Liberal Democrat members of the coalition – as a return to the 18th century.

Yvette Cooper, the shadow Work and Pensions Secretary, said: "Localising benefits would mean a postcode lottery, where the support people receive would be determined by their address, not their needs."

Mr Duncan Smith delivered a damning assessment of the benefits system, describing it as "antiquated" and "on the verge of breaking down". He said it trapped claimants into "ghettos of worklessness" where they were better off living on allowances and tax credits than taking a job.

One option floated yesterday was for all benefits to be scrapped for people who find work. They would receive tax breaks to ensure they had more money than when they were on the dole. Alternatively, a taper system could be introduced under which benefits are gradually phased out as a person's pay increases.

His report was a consultation document, but government sources said rapid action would follow to overhaul the structure of benefits.

Critics raised fears that the plans would lead to cuts in levels of allowances. The report warned: "Demographic changes mean that the cost of the welfare system is predicted to rise at a time when we can least afford it." Brendan Barber, the secretary general of the TUC, said: "While the aim behind this certainly has merit, ministers have a big problem.

"Either you make those who are out of work poorer – yet we already have jobless benefit levels way below those when Mrs Thatcher was in power.

"Or you can boost income in work either through more generous benefits or a higher minimum wage. The first should be morally unacceptable, while the Treasury will not allow the second."

But Corin Taylor, senior policy adviser at the Institute of Directors, said: "The current welfare system is letting down both claimants and employers, and the radical reform proposals set out in this report are very welcome."

Sally Copley, Save the Children UK's head of policy, added: "The current system is too complex and produces too many disincentives to work, but the Government must be prepared to invest in these changes and they must not lead to cuts in benefits for our most vulnerable families."

VIDEO
Have you tried new the Independent Digital Edition iPad app?
Arts & Entertainment
Ricky Gervais at a screening of 'Muppets Most Wanted' in London last month
tvRicky Gervais on the return of 'Derek' – and why he still ignores his critics
Sport
Luis Suarez of Liverpool celebrates his goal
sport
Arts & Entertainment
Homer meets Lego Marge in the 25th anniversary episode of The Simpsons, set to air on 4 May
tv
Arts & Entertainment
James Franco and Chris O'Dowd in Of Mice and Men on Broadway
theatreReview: Of Mice and Men, Longacre Theatre
Life & Style
Infant child breast-feeding with eyes closed
healthTo stop mummy having any more babies, according to scientists
News
news
Life & Style
Going down: Google's ambition to build an elevator into space isn't likely to be fulfilled any time soon
techTechnology giant’s scientists say there is no material strong enough for a cable from Earth into orbit
Arts & Entertainment
film
News
David Cameron sings a hymn during the enthronement service of The Most Rev Justin Welby as Archbishop of Canterbury, at Canterbury Cathedral last year
news
Life & Style
From long to Jong: Guy Pewsey gets the North Korean leader's look
fashionThe Independent heads to an Ealing hairdressers to try out the North Korean dictator's trademark do
Extras
indybest10 best smartphones
Arts & Entertainment
tvCreator Vince Gilligan sheds light on alternate endings
Life & Style
Google Doodle celebrates the 63rd anniversary of the Peak District National Park
tech
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Have you tried new the Independent Digital Edition iPad app?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Apprentice IT Technician

£150.00 per week: QA Apprenticeships: This company is a company that specializ...

1st Line Technical Service Desk Analyst IT Apprentice

£153.75 per week: QA Apprenticeships: This company is an innovative outsourcin...

1st Line Helpdesk Engineer Apprentice

£150.00 per week: QA Apprenticeships: This company has been providing on site ...

Sales Associate Apprentice

£150.00 per week: QA Apprenticeships: We've been supplying best of breed peopl...

Day In a Page

Ricky Gervais: 'People are waiting for me to fail. If you think it's awful, then just don't watch it'

Ricky Gervais: 'People are waiting for me to fail'

As the second series of his divisive sitcom 'Derek' hits screens, the comedian tells James Rampton why he'll never bow to the critics who habitually circle his work
Mad Men series 7, TV review: The suits are still sharp, but Don Draper has lost his edge

Mad Men returns for a final fling

The suits are still sharp, but Don Draper has lost his edge
Google finds a lift into space will never get off the ground as there is no material strong enough for a cable from Earth into orbit

Google finds a lift into space will never get off the ground

Technology giant’s scientists say there is no material strong enough for a cable from Earth into orbit
Westminster is awash with tales of young men being sexually harassed - but it's far from being just a problem in politics

Is sexual harassment a fact of gay life?

Westminster is awash with tales of young men being sexually harassed - but it's far from being just a problem in politics
Moshi Monster creator Michael Acton Smith: The man behind a British success story

Moshi Monster creator Michael Acton Smith

Acton Smith launched a world of virtual creatures who took the real world by storm
Kim Jong-un's haircut: The Independent heads to Ealing to try out the dictator's do

Our journalist tries out Kim Jong-un's haircut

The North Korean embassy in London complained when M&M Hair Academy used Kim Jong-un's image in the window. Curious, Guy Pewsey heads to the hair salon and surrenders to the clippers
A History of the First World War in 100 moments: A forgotten naval victory in which even Nature played a part

A History of the First World War in 100 moments

A forgotten naval victory in which even Nature played a part
Vespa rides on with launch of Primavera: Iconic Italian scooter still revving up millions of sales

Vespa rides on with launch of the Primavera

The Vespa has been a style icon since the 1950s and the release this month of its latest model confirms it has lost little of its lustre
Record Store Day: Independent music shops can offer a tempting alternative to downloads

Record Store Day celebrates independent music shops

This Saturday sees a host of events around the country to champion the sellers of well-grooved wax
Taunton's policy of putting philosophy at heart of its curriculum is one of secrets of its success

Education: Secret of Taunton's success

Taunton School, in Somerset, is one of the country's leading independent schools, says Richard Garner
10 best smartphones

10 best smartphones

With a number of new smartphones on the market, we round up the best around, including some more established models
Mickey Arthur: Aussie tells ECB to stick with Ashley Giles

Mickey Arthur: Aussie tells ECB to stick with Ashley Giles

The former Australia coach on why England must keep to Plan A, about his shock at their collapse Down Under, why he sent players home from India and the agonies of losing his job
Homelessness: Why is the supported lodgings lifeline under threat?

Why is the supported lodgings lifeline under threat?

Zubairi Sentongo swapped poverty in Uganda for homelessness in Britain. But a YMCA scheme connected him with a couple offering warmth and shelter
A History of the First World War in 100 Moments: When the world’s biggest shed took over Regent’s Park

A History of the First World War in 100 Moments

When the world’s biggest shed took over Regent’s Park
The pain of IVF

The pain of IVF

As an Italian woman vows to keep the babies from someone else’s eggs, Julian Baggini ponders how the reality of childbirth is often messier than the natural ideal