David Cameron indicates universal benefits face curbs

Universal allowances, such as child benefit, could be curbed to help fund a major shake-up of the welfare system, David Cameron has indicated.

The prime minister wants to wrap all existing out-of-work benefits into a single payment that encourages work.

Speaking as the Tory conference got under way in Birmingham, he said the plan would get substantial numbers of people off benefit and into work.

Labour accused the government of planning a massive assault on families.

But Mr Cameron told the BBC the coalition's planned welfare reforms were "refreshingly radical" and would mean people would always be better off in work.

Appearing on the BBC's Andrew Marr Show, he said the welfare reforms would cost more upfront, but the changes would be phased in, with other welfare savings made to cover the cost.

He declined to confirm or deny reports that these cuts would include ending some universal benefits such as child benefit paid for those over the age of 16.

He said: "On the one hand we have got to ask, are there some areas of universal benefits that are no longer affordable?

"But on the other hand let us look at the issue of dependency where we have trapped people in poverty through the extent of welfare that they have."

At the moment, parents are paid £20.30 a week child benefit for the eldest child and £13.40 for subsequent children, with payments continuing until the age of 19 for those in full-time education.

The BBC understands that most welfare claimants would not be transferred on to the new universal benefit system until after the next election - meaning the extra costs would not have such a big impact on the forthcoming spending review.

The Government will set out the details of its plans in a white paper this autumn with a Bill enacting the reforms introduced to parliament next spring, probably becoming law in late 2011 or early 2012. A new IT system needed for the universal benefit would then be set up by the end of 2013.

'Affordable'

Then, under current plans, the long term unemployed and new claimants would be the first to move from their existing benefits to the new universal benefit. But most other claimants would not follow them until after the election in 2015.

A government source said: "Spreading this over two parliaments makes this much more affordable within the spending review. It is considerably less expensive because we've backloaded it. The first people to migrate (over to the new benefit) will be the long term out of work. They are the people who want help most. Then, later, we will look at the rest."

Mr Cameron told the Andrew Marr Show that in the longer term single welfare payments system would save "huge amounts of money" because there would be less error, fraud and waste.

He added that "because it's always worth people going into work, you will actually reduce benefits".

Welfare reform has been seen as key to plans to cut the UK's deficit, but has been the source of reported tension between the Treasury and Work and Pensions Secretary Iain Duncan Smith.

'Massive assault'

Mr Cameron said the proposed changes, to bring welfare benefits for the unemployed and low-paid together under a new "universal credit" system, were the most far-reaching for more than 60 years.

The prime minister also sought to calm fears about planned spending cuts, to be announced in two weeks time, urging people to put them in "perspective".

Anti-cuts protesters marched through the centre of Birmingham

He also trailed plans to spend £60m on better cancer screening tests.

The new bowel cancer screening programme could save an estimated 3,000 lives a year, the Department of Health said.

Shadow work and pensions secretary Yvette Cooper, for Labour, accused the government of "planning a massive assault on families".

"Cutting child benefit for 16-year-olds will hit hard-working parents who badly want their children to stay on at school.

"This is an attack on aspiration and on overstretched families who want their teenagers to do well.

"The government is already cutting £3bn from tax credits and support for children.

"Introducing means-testing for child benefit as well would put many low and middle-income families off claiming the support they badly need."

Protests

As Conservatives gathered for their first conference since winning power, in coalition with the Lib Dems, anti-cuts protesters marched through Birmingham city centre.

Mark Serwotka, general secretary of the Public and Commercial Services Union, promised a wave of strike action across the country in response to the government's spending plans.

He urged the thousands of protesters gathered outside the conference to start planning for industrial action now.

"Strikes are inevitable. We are stronger if we get together. Striking together will not just happen on its own."

He told the crowd of activists, trade unionists, students and others that if they "stand together" they could "turn the tide" against the cuts.