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PM floats radical benefits reforms
The Government could break the link between benefits and inflation in order to save money on the £84 billion bill for working-age welfare, Prime Minister David Cameron has suggested.
The change was among a set of radical reforms to the benefit system floated by the PM in a speech setting out his determination to end the "culture of entitlement" which sees some people living long-term on welfare with higher incomes than neighbours who work.
Other ideas floated by the PM include withdrawing housing benefit from under-25s, removing the right for high-earners to keep their council homes, a reduction in the £20,000-a-year cap on housing support and limits on the additional benefit received by families with three or more children.
But a proposal to introduce regional welfare levels - so that people in areas where pay is lower also receive lower benefits - was removed from the speech at the last minute.
New requirements could be introduced for claimants to learn to read and write, to draw up a CV and to take action to improve their health in order to continue receiving benefits, the PM suggested. And single parents could be required to prepare to go back to work once their child has reached three years old.
The Government is already cutting the point after which lone parents have to seek work from seven to five years after their child's birth. But Mr Cameron suggested that once the child is three, parents should at least be spending part of the week going to the JobCentre, preparing their CVs and learning new skills.
Mr Cameron stressed that he was not setting out policy plans but trying to start a national debate on the future of welfare.
He said he aimed to work with his Liberal Democrat partners on some of the ideas over the next few years, but that others might feed into the Conservative manifesto for the general election expected in 2015.
Out-of-work benefits like Jobseeker's Allowance have traditionally been raised in line with inflation in September, and the decision to stick with this system meant that they increased this year by 5.2% - far more than the pay rises received by most workers.
Mr Cameron said it was time to ask "whether this is the right approach", adding: "It might be better to link benefits to prices unless wages have slowed, in which case they could be linked to wages."