By Jon Ashford

The number of benefits should be dramatically decreased – from 51 to just two – the former head of the Conservative party has suggested.

Iain Duncan Smith, chair of centre-right think tank Centre for Social Justice (CSJ), claimed drastic measures were needed to rehabilitate the large number of residual unemployed.

Appearing on the Today programme, Mr Duncan Smith criticised decades of political inaction on welfare reform, saying that “every government has failed” to reduce the cost of welfare, and that under the present government, welfare spending “had increased by twenty percent in real terms”.

“The benefit system right now is so complicated and out of control that every prediction every politician has ever made, about money to be put in, has been wrong,” he said.

His comments supported research published by the thinktank he created today, the Centre for Policy Studies.

Apart from reducing the numbers of benefits to just two – a universal life credit and a universal work credit – Mr Duncan Smith also said benefits should continue into employment to “smooth the path into work”.

“An unemployed person going into work faces one of the most regressive tax systems. [they] can face withdrawal rates of 90 per cent. In other words they will be lucky if they retain 10 pence on every pound.”

The Tory MP acknowledged that any government adopting these proposals would have to spend around two billion, but that over an 18 month period the savings would be “dramatic”.

Tomorrow’s people, a charity that aims to help the unemployed, indicated “broad support” for the report’s proposals.

“We think that in tandem with this proposal there needs to be long term support for people on their journey back into the workplace, along with support for new employees and their employers for the first year once someone starts in a job to help a new employee become established in the workplace.”