Jill Kirby: The trick is to succeed where a Labour government failed

Reducing the "bills of social failure" was impossible for the Labour Government, to the extent that 2009's welfare bill was £190bn – exceeding the total revenue raised in income tax and corporation tax.

If the coalition Government can succeed where Labour failed, then our public finances will start to look rather more manageable. But how much pain will be felt as the cuts start to bite? Will those cuts be fair and will Welfare Secretary Iain Duncan Smith succeed in his declared aim of protecting society's most vulnerable?

Today's DWP report on incapacity benefit suggests there is real scope for relatively painless savings – and much pent-up unfairness in the system.

It has long been acknowledged that an improbably high number of welfare claimants are deemed unfit for work and therefore entitled to claim higher rates of benefit than the standard jobseekers allowance, worth up to an extra £25 each week. Labour belatedly recognised this problem and in 2008 began to introduce a replacement for Incapacity Benefit, termed Employment Support Allowance (ESA). The Coalition has taken up where the last government left off and has injected new urgency into its review of claimants. Confirming provisional findings from earlier studies, the latest DWP report finds that only six per cent of all new ESA claimants are so incapacitated as to be unable to take part in work or work preparation; another 14 per cent would be entitled to payments but required to take part in job preparation. Another 39 per cent have been deemed fit for work, so that they will receive Jobseekers Allowance while they look for work. And a remarkable 37 per cent dropped their claims, presumably recognising they were unlikely to pass the test, had got better or had found work.

New claimants are just the tip of the benefit iceberg. It will be a long haul to roll out these tests for all 2.6 million existing incapacity claimants. But these results demonstrate the kind of savings to be had. Labelling 2.6 million adults of working age "incapable" of work only serves to divert attention (and sympathy) away from the smaller number of disabled and vulnerable people who deserve the safety net we all have a responsibility to provide.

Jill Kirby is director of the Centre for Policy Studies