Two million 'wrongly claim incapacity benefit'

A government welfare adviser has argued less than a third of the UK's 2.7 million incapacity benefit claimants are legitimate.

According to David Freud, an investment banker hired by new work and pensions secretary James Purnell, up to 185,000 people claiming incapacity benefit (IB) continue to work illegally while receiving benefit payments.

In an interview with the Daily Telegraph newspaper, Mr Freud argued it was "ludicrous" that the medical checks used to award benefits were carried out by a claimant's own GP.

"They've got a classic conflict of interest and they're frightened of legal action," he explained.

Mr Freud, whose welfare report last year played an integral role in the reforms confirmed on Monday by newly-installed work and pensions secretary Mr Purnell, explained that claimants on IB received more state aid than those on unemployment benefit.

He added: "The system sends 2.64 million people into a form of economic house arrest and encourages them to stay at home and watch daytime TV. We're doing nothing for these people.

"You don't need to make a huge fuss about categorising people. If you're disabled, work is good for you and not working is bad for you.

"The people who are really disabled are often the ones who are really desperate to work, but there are then a whole load of people who say they don't want to be made to work regardless."

Critics of the assessment system for IB have claimed successive governments have allowed the number of claimants to increase, in order to keep down the number of citizens receiving unemployment benefit.

"When the whole rot started in the 1980s we had 700,000 [claimants]. I suspect that's much closer to the real figure than the one we have now," Mr Freud added.

More than 500,000 people under 35 now claim incapacity benefit, which costs the Treasury around £12 billion a year.

Thousands of claimants receive state aid for mental health problems, while many cite conditions such as alcoholism and obesity.