Blair to back down on plan for time-limit on disabled benefits

Tony Blair is to back down over a plan to impose a maximum time limit for people to claim incapacity benefit to cut the £7.7bn annual bill. Downing Street advisers propose a cut-off point of two or three years, after which the 2.7 million claimants would transfer to other, less generous benefits, such as income support.

Tony Blair is to back down over a plan to impose a maximum time limit for people to claim incapacity benefit to cut the £7.7bn annual bill. Downing Street advisers propose a cut-off point of two or three years, after which the 2.7 million claimants would transfer to other, less generous benefits, such as income support.

But Mr Blair has faced opposition from Alan Johnson, the Secretary of State for Work and Pensions, Gordon Brown, the Chancellor, and Labour MPs. No 10's pressure for a time limit was a factor in the decision by Mr Johnson's predecessor Andrew Smith to resign in September. But Mr Johnson, a Blairite, has also resisted the Downing Street plan.

Mr Johnson and Mr Brown want a "softly softly" approach, with personal advisers helping sick and disabled people get back to work. In Mr Brown's pre-Budget report, he said the Pathways to Work scheme would be extended from 10 per cent of the country to a third.

Mr Blair is determined to cut the bill for incapacity benefit in a reform package for a five-year plan for the Department of Work and Pensions to be published next month. But Blair aides suggested plans for a time limit would be dropped, saying that would be a "blunt instrument" when the new scheme was showing signs of success.

Quarterly figures in September showed the number of people receiving incapacity benefit had fallen for the first time. Although the 4,000 drop was small, ministers hope the numbers on the benefit have peaked as a result of the pilot scheme. They hope the next quarterly figures, published today, show a further drop. Jane Kennedy, the minister for Work, said: "For most people, being out of action and on benefits on the long term is not inevitable. About two-thirds of people on incapacity benefits were told by their doctor that they should not work. Many have also faced a lack of adequate support, even discrimination, on the part of employers."

She told the Social Market Foundation think-tank: "We need to bring together the best practice of employers in managing sickness absence, the medical profession in promoting well-being and the Government in supporting people on benefits back into work."

The scheme is based on contact every month with a personal adviser in the first eight months of the claim, when people can most readily be helped back to work, and a £40-a-week return-to-work credit.