Benefits system 'encourages lying'

Britain's benefits system encourages claimants to lie and cheat to secure payments, a former welfare minister will claim.

Labour's Frank Field, who has worked as a poverty adviser to the coalition, will warn paying out based on need brings out the "worst side of human nature".

Mr Field, who was told to "think the unthinkable" while serving as welfare minister under Tony Blair only to quickly leave government after clashes with colleagues over the results, will call on his party to back radical reforms that would mean the state paid claimants based mainly on their contributions.

"As we now have a welfare state based on meeting need, this encourages individuals, not unreasonably, to try to ensure that they qualify under this guise. It therefore pays to lie about one's earnings, to cheat, or to be inactive," he will tell the Institute of Economic Affairs.

"The worst side of human nature is encouraged, the best is penalised.

"The next Labour government must commit itself to turning a welfare state which now largely meets needs to one where help is based primarily on contributions."

Mr Field will call for a salary-related unemployment insurance scheme that rewards those who contribute and a revamp of eligibility rules for means-tested benefits.

He will add: "In moving away from our current welfare state it is crucial to make a new contract with taxpayers so that they know that, over time, their contributions will be better rewarded than those who qualify only on the basis of need.

"This cannot be achieved immediately, but this should be one of the Labour Party's longer term aims. Labour needs to be seen to begin achieving these aims in the first changes it makes to social security benefits, primarily through increasing insurance-based benefits and freezing means-tested benefits."