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Page last updated at 09:21 GMT, Tuesday, 8 January 2013

Iain Duncan Smith: Benefits 'outrageously messy'


The level of benefit spending in the UK has steadily risen for more than 30 years.

But the government has now proposed raising most benefits by less than the rate of inflation - a cut in real terms.

MPs will vote on the measure, which is dividing the coalition, on Tuesday.

Work and Pensions Secretary Iain Duncan Smith, told the Today programme: "The last government created an outrageously messy system called tax credits where 70% of the money does not go to work-related payments, it goes to child tax credits, which have no work requirement placed on them."

Around 60% of the welfare bill goes on pensions, but Mr Duncan Smith said that pensioners will be largely unaffected by these changes, due to their reliance on a fixed income.

"Pensioners have less flexibility, they find it far less easy to make provision to change. They can't move into work or change their income the way others - who are in work-related benefit - can do.

"In the longer term, the cost of pensions will fall because of the changes that we've made, by dramatic degrees. So we are making savings from pensions, but in the much longer-term, as that begins to change because more people will save, and fewer people will depend on state."

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