Large numbers of long-term unemployed will be forced to work or lose their benefits under sweeping changes to the welfare system outlined in a green paper published yesterday by James Purnell, work and pensions secretary.
Some 2.6m people claiming incapacity benefit at present would be expected - in all but the worst cases - to make themselves available for some kind of work, while those on the dole for more than two years could "be forced to take part in full- time activity such as community work," said Mr Purnell
The aim was to cut incapacity benefit claimants by 1m by 2015. Only full-time carers and disabled people "with the greatest needs'' would be exempt from being expected to find work.
David Cameron said Conservatives would support the proposals even if Labour suffered a rebellion by angry backbenchers opposed to the plans to reward private companies for training and preparing people to return to work.
Business leaders welcomed the measures but warned they would only take on staff if they meet required standards.
John Cridland, CBI deputy director general, said: "Taking on staff with limited recent work experience and often complex personal problems is not straightforward, and support is needed both for employer and applicant. The scheme must deliver candidates who are ready for sustainable employment."
John Atkinson, associate director at the Institute of Employment, warned that allowing private contractors to keep part of the benefit savings as profit would require careful monitoring so that they did not just cherry-pick "easy cases".
Under the proposals, incapacity benefits and income support would be replaced by 2013 by a "more stream-lined system" based on just two benefits: employment and support allowance (ESA) for those with medical conditions, and job seekers allowance for everybody else.
People currently on incapacity benefit would be required to undertake a new enhanced medical assessment to reveal "what they can do, not on what they can't". People with severe disabilities would not be expected to seek work and would receive extra cash.
Lone parents with children under seven would not be required actively to seek work but would be eligible for a "skills for work" payment on top of existing benefits to encourage them to make themselves more employable. Drug users would be required to seek treatment or risk losing benefits.
In return the government plans to double funding of its access-to-work programme which at present helps 24,000 disabled people a year find work or stay in employment. People on incapacity benefit would also be eligible for an extra £40 a week to top up their wages to "ease the transition to work" while child maintenance would be disregarded when calculating benefits.
Brendan Barber, TUC general secretary, criticised the proposals. He said: "This is a mistake. There are already sufficient sanctions to deal with benefit claimants who cheat the system. With the economy slowing down, and many commentators expecting unemployment to rise, now is not the time to start blaming the victim."
Jeremy Corbyn, Labour MP for Islington North, said that the government seemed to be "punishing people for being poor''.
