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November 17 - 23 2010

News

1008

The Telegraph

The Telegraph

μNews

PAGES 2-13

μWorld News PAGES 14-17

μComment PAGES 18-21

μ Letters

PAGE 20

μObituaries PAGES 22-23

μ Features

PAGES 24-26

μCulture

PAGES 27-29

μExpat Life PAGES 30-32

μBusiness

μClassified

μPuzzles

μSport

PAGES 33-37

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PAGES 40-48

NEWS P10

NEWS P8

Who needs NASA? British team launch a paper plane into space from Spain

An ‘appalling lack of care’ Inquiry to find out why Mid-Staffordshire NHS failed

EXPAT LIFE P32

CULTURE P27

The jazz priestess Peter Culshaw talks to Cassandra Wilson about her new album

World’s Best Places to Live Our competition concludes with readers’ top 10 entries

LOTTO 10/11

LOTTO 13/11

26 15 30 35 40 41 5 11 29 31 35 39

Bonus Ball 34

Bonus Ball 45

There were two winners of Saturday’s £4.6m jackpot and one winner of Wednesday’s £2.9m prize

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By Andrew Porter and Robert Winnett UNEMPLOYED workers will be barred from claiming benefits for up to three years if they repeatedly refuse job offers under radical plans to reform the welfare system that were unveiled last week.

Anyone claiming unemployment benefit will have to sign a “three strikes and you’re out” contract setting out punishments for the work-shy. Iain Duncan Smith, the Work and Pensions Secretary, will announce a “claimant contract” which will set out the sanctions against those refusing to take up offers of work.

Those who fail to accept a job offer, or refuse to apply for a position recommended by an employment adviser will, on the first occasion, lose their £64-a-week Jobseeker’s Allowance for three months.

If they do it a second time their benefit will be halted for six months. If they refuse for a third time they will lose the benefit for three years.

Those who refuse to take part in unpaid community work, which will become mandatory as part of the Government’s new welfareto-work plans, will be subject to the same penalties.

Last week, David Cameron said a “life on benefits” would no longer be an option for those capable of returning to work. The sanctions for benefit claimants are part of a radical raft of reforms being proclaimed as the biggest changes to the welfare state since it was set up more than 60 years ago.

The wide array of benefits currently offered to those out of work will be replaced by a single “universal credit” from 2013.

This will ensure that those returning to employment will always be better off than if they remained on benefits.

At the moment, those returning to work can lose up to 95p in benefits for every £1 they earn, but this is expected to be limited to around 65p.

Ministers believe the change will mean that about 2.5million people will be better off. Mr Duncan Smith hopes the measures in his welfare White Paper will cut the number of workless households by 300,000 by ending the current “perverse system”.

However, the new system will be administered by HM Revenue and Customs, leading to fears of potential administrative problems.

‘If you won’t be a worker bee, I’ll find you some community work’

‘I’ll be operating on you – if I hadn’t taken this job they’d have stopped my benefits’

Last week, speaking in South Korea, Mr Cameron said: “The message is clear. If you can work then a life on benefits will no longer be an option.”

He added: “If people are asked to apply for a job by an adviser, they will be expected to put themselves forward. If people can work, and they are offered work, they will be expected to take it.

“This is the deal. Break that deal and they will lose their unemployment benefit. Break it three times and they will lose it for three years.”

Downing Street aides insisted the measures were not simply about appearing to be tough on “scroungers”. Instead, they claimed Mr Cameron was in no mood to listen to a host of “tired excuses” about people who did not attend job interviews or accept jobs. Details of the proposed sanctions may be met with some scepticism as previous attempts to penalise those refusing employment have often failed. Ministers will be reluctant to approve anything that leads to families losing their homes or being unable to afford food and other basics.

There are fears that malingerers may accept offers of work and then behave badly so that they are quickly dismissed. Well-placed sources said that the scheme was designed to deter those “milking the system”.

“Very few people will actually lose their benefits but this is to stop people transgressing,” said a source. “Most unemployed benefit claimants want to return to work with the right support and help.”

The Coalition’s measures are aimed at helping to cut the soaring welfare budget. Britain has one of the highest numbers of workless households in Europe, with 1.9 million children living in homes where no one is employed. About five million people rely on out-of-work benefits, including incapacity benefit.

Since 1997, the welfare budget has risen by more than 40 per cent, after inflation, from £63 billion to £87billion. The system currently penalises some people returning to work with high marginal rates of tax which the new proposals are designed to address.

Mr Cameron said: “It simply has to pay to work. You can’t have a situation where if someone gets out of bed and goes and does a hard day’s work they end up worse off.”

By Bruno Waterfield in Brussels and Robert Winnett IRELAND was fighting for its political and economic independence on Sunday night as secret negotiations began in Brussels over an international bailout of up to £77billion.

Talks went on into the night as Irish ministers insisted they could manage their stricken finances but other governments expressed concerns that an emergency bail-out may have been required as early as Monday.

Investors have rushed to sell Irish debt in recent weeks and there is growing speculation that if Europe fails to intervene there may be a run on other countries, including Spain and Portugal. The EU rescue package, seen as “very likely” by European officials, could cost British taxpayers as much as £7billion following a deal agreed by Alistair Darling when he was still chancellor in the political limbo following the general election in May. Under its terms, Britain agreed to underwrite EU plans to rescue countries in difficulty.

Ireland has been driven to the brink of an international rescue deal because its economy, which grew sharply on the back of a booming property market and a burgeoning financial services sector, has suffered the deepest recession of any developed economy.

The so-called Celtic tiger is facing problems repaying record government debt as it struggles with high unemployment and the costs of some of the world’s biggest bank bailouts.

But, the government is wary about applying for emergency help from Europe amid fears that international regulators will intervene in its affairs. It may be forced to increase tax as a condition of any deal.

Irish ministers denied they would need international assistance, although the Greek government made similar claims shortly before its bailout earlier this year.

Sources confirmed that Irish and other eurozone governments were holding “frantic” talks with officials from the European Central Bank and the EU last weekend. “Things are moving quickly,” said an Irish official.

Ireland has experienced the worst recession of any major economy and has amassed government debt of more than €100 billion (£85 billion). It has an unemployment rate almost twice as high as Britain at 13.2 per cent and has a record deficit equivalent to 32 per cent of its gross domestic product.

A full bailout deal, rumoured to be to worth between £51billion and £77billion could be agreed at a meeting of EU finance ministers. Most of the help will come from the £374 billion European Financial Stability Fund, which is funded by eurozone countries.

However, the support of all countries will be needed because part of the aid package will come from a £50 billion EU emergency fund underwritten by Britain to the value of £7billion.

A rescue deal would be unpopular with Irish voters, who value national independence and the lowtax regime that pulled in foreign investment from America and other nonEuropean companies, fuelling high Irish growth rates over the past 20 years. Ministers hoped they could “tough out the markets” until the government could demonstrate it was addressing the country’s debts. A four-year austerity plan and budget will be presented to the Irish parliament in December.

Business: Page 33